Logging in Lush Alaskan Forest Profits Companies and Costs U.S.

By TIMOTHY EGAN, Special to The New York Times

Published: May 29, 1989

Correction Appended

SITKA, Alaska—
Here in the emerald panhandle of southeastern Alaska, where rain is measured in feet and the legacy of Russian America can still be seen in onion-domed churches, the Forest Service sells 500-year-old trees for the price of a cheeseburger.

If sold on the open market, those same $2 Sitka spruce trees would cost up to $300 a log. The wood is bought by two pulp mills, one of them owned by a Japanese investment consortium. The mills say they are turning a handsome profit on America's biggest and, to the American taxpayer, costliest national forest. #98 Cents Lost on Each Dollar In some years, the Forest Service has lost 98 cents for every dollar it spent on the logging program in the Tongass National Forest, a network of evergreen-covered islands and lush valleys encompassing most of the 500-mile long Alaskan panhandle.

Critics say the timber management of the Tongass demonstrates that the Forest Service spends most of its money serving industry to the detriment of the environment and taxpayers. They say that the agency has lost sight of its mission, to manage and protect the public forests for the benefit of all, and that the failure is nowhere more evident than here.

Proponents of the Tongass program, including both of Alaska's Senators and its lone member of Congress, say losing money on timber sales is no different from spending money to buy wilderness. They say small towns in sparsely populated Southeast Alaska would be hit hard if the Government did not keep them alive with the income generated from the below-cost timber sales.

Now, with bills pending in Congress that would cut the timber subsidy, the outcome of the fight could shape the future direction of the Forest Service, which has been criticized for its management of the 156 national forests, one-third of which lose money selling their trees to industry.

The Tongass controversy, like nearly everything in Alaska, is full of extremes.

At 16.5 million acres, the national forest is roughly the size of West Virginia. Only about a third of it is prime timber land. The rest is scrub trees, ice, rock and glacial moraine where nothing grows but lichen.

For years, the Forest Service has been trying to develop a timber industry here, home of rich salmon spawning streams and the highest concentration of bald eagles and brown bears in the nation.

But the remote and roadless country, far from big markets, has been unattractive to business. In the 1950's, the service succeeded in luring two pulp mills to the region by offering them 50-year, low-cost timber contracts. The mills, one in Ketchikan and one in Sitka, grind Tongass timber into pulp, most of which is then sold to Asian countries where it is processed into synthentic fabric for clothing.

Whether there should be any Government-sponsored logging at all here is hotly debated. Environmentalists say the Tongass, as one of the world's last temperate rain forests, is more valuable as a climate-cooling canopy.

In a Congressional hearing this year, Senator Tim Wirth, a Democrat from Colorado who is the prime sponsor of a bill to alter the Tongass management, said cutting the Alaskan rain forest was contributing in a small way to global warming. Senator Frank H. Murkowski, a Republican from Alaska, replied that cutting old trees was actually beneficial to the atmosphere because the young trees that would grow back in place of the aging giants would give off more oxygen.

What draws the most criticism is the $400 million the Forest Service has spent running the logging program in the last eight years.

When Congress was considering the creation of 5.4 million acres of Tongass wilderness in 1980, Senator Ted Stevens, Republican of Alaska, added provisions that set a goal for the Forest Service to cut roughly 170,000 acres of the forest every 10 years and to spend at least $40 million doing it. The spending is not subject to annual Congressional review.

Shortly after the 1980 bill passed, the timber market collapsed. Jobs in the two Tongass pulp mills fell 40 percent. Yet the Forest Service kept building roads and preparing timber sales for wood that nobody wanted to buy.

A report on the Tongass forest by the General Accounting Office, an investigative arm of Congress, said the Forest Service spent $131 million for five years of road building and surveying in old-growth forests that the mills did not want to buy.

The price of timber remained relatively low until 1986, but today is at its highest level in more than a decade. Loss of Jobs Threatened

Under terms of their contracts, the mills are entitled to buy up to 15,000 acres of Tongass timber a year at $2.19 per 1,000 board feet, less than 1 percent of the market price, which is $100 to $400 per 1,000 board feet, depending on the grade of wood. Without the agreements, the mill owners say, they might close their operations and eliminate 1,800 jobs.

Correction: June 5, 1989, Monday, Late Edition - Final A map last Monday misidentified the area of the Tongass National Forest in Alaska, which encompasses most of the 500-mile Alaskan Panhandle. A corrected map appears today on page B6. A map last Monday misidentified the area of the Tongass National Forest, which encompasses most of the 500-mile Alaskan Panhandle. The story was about the debate over Government-sponsored logging in the region.